be in michigan talking about jobs and technology today, we should mention that, something that's happening. in the meantime, big night tonight, the debate. jon: "america live" starts right now. megyn: welcome, everyone. this is a fox news alert. some drama on the campaign trail just happened in iowa. this comes just hours ahead of a key debate that will test the future of eight republican candidates all hoping to make it all the way to the white house in 20123. welcome to move, everyone, i'm meg -- welcome to "america live," i'm megyn kelly. it got a little ugh ri for mitt romney moments ago when he met with some voters at a campaign stop. more on that in a moment. we're queuing up the tape. first, a live look at stevens auditorium in ames. look at that. it looks pretty, doesn't it? the just a few -- in just a few hours we'll broadcast the high stakes debate between these

eight hopefuls, and the stakes are very, very high. with the campaign season set to kick into high gear, tonight's faceoff will help determine who will stay in the race and who will end their campaign for president. chris stirewalt is our fox news digital politics editor. i'm told you have some information on what happened with romney as he was out there campaigning. again, i want our viewers to know we've got this on tape, we have to ingest it and turn it so you can see it for yourselves, and we're going to do that in a moment, but i want to talk to chris about it first. chris, what do you know? >> reporter: governor romney got a nice early start today, he got to warm up for his debate because by the time he got to where he was going to give his remarks, little soap box there at the iowa state fair, there was already a cluster of folks who were waiting for him, started peppering him with increasingly aggressive questions about social security, basically accusing him of being at war with the middle class, telling him he was going to slash social security, very

reminiscent of what we hear from labor groups and their talking points. the folks went right after governor romney. now, what was interesting about it and what's probably significant for tonight is that romney was ready. he was locked and loaded, and he came right back at these guys, and he said, hey, look, you've had a time to speak, this is my time to speak. he stood his ground and pushed back, and that is probably a fore taste of what we're going to see when he gets on stage tonight and he's taking the heat from the other seven republicans on stage. megyn: i want to get to tonight, but how much of this are we going to see at these campaign events with respect to people like romney who's considered the front runner at least for now? >> reporter: well, look, for labor groups, for democratic and liberal organizations they see this as all the marbles, and they have to do as much damage to the republican front runner, whoever that is, at any given time as this process goes forward. so we are going to see this just as we saw in wisconsin which was sort of a microcosm where you

had the senate recall elections, and the groups got very tough and got in people's face, and i think you can expect to see a great deal of this not just in the primary, but as we get into the general. megyn: all right. so we talk a little bit about romney. he, according to you, has run a flawless campaign, so he's hoping to keep that going. i want to talk about other candidates including michele bachmann. you had an interesting article in your power play piece talking about how this is a make or break moment for her. why? >> reporter: well, if you think about it this way, megyn, when she got into this race, expectations for her were very low because she was sort of written off, liberals love to hate her, and she's somebody who people were not taking seriously. but people who cover congress and have known her say, look, this is somebody that can make her point, she can deliver a message and get people fired up. and she did that. she got into this race. when she went in the first debate in new hampshire, she shook everybody up, and people took her seriously. now she's got to raise the bar one more time. she's got to demonstrate that

she can stand toe to toe with mitt romney, that she has the grasp of the issues, and she can be taken seriously. if she does well tonight, she's bought herself a place in the top tier for good and probably is in it until the end. if she stumbles and has a problem, the trajectory changes fast. megyn: how about tim pawlenty? you called him the ford taurus of this race. why? explain that. >> reporter: i love a ford taurus, it is a great car, it is reliable, good mileage, fantastic vehicle, but it doesn't get people fired up. if you go into the rental car lot, you're happy to see it, but it doesn't jazz you. now, mitt romney, he's offering sort of a jaguar. it's sleek, it's elegant, it's attractive. it's maybe not a bread and butter, but people know it, and it's desirable. michele bachmann's driving a humvee. it's big, loud, brash, it gets people excited. and here's poor old tim pawlenty just chugging along in his neat and clean ford.

he's doing fine, but he's got to do something that gets people excited. and tonight's the night that he needs to go from a rental to something that people want to buy and drive off the lot. megyn: he has failed to tibet people excite -- to get people excited at this point, so if he doesn't do that tonight, chris, is he as you say with michele bachmann, that'll be it for him if he doesn't do well tonight? is. >> reporter: he's got tonight, he's got the make or break straw poll on saturday. if he's not in the top three or probably top two in the straw poll and doesn't have a strong performance here tonight, the money will start to dry up, and his trail will start to come to an end. megyn: now, if you were a car, what kind of car would you be? >> reporter: i would be a probably 1988, i would probably be a 1988 ford bronco, probably have some rust spots but would do great offroad. [laughter] megyn: i think i would be a jeep. tough but cute. >> reporter: you would. that's right. i dig it. megyn: thanks, chris. see you tonight. >> reporter: you bet.

megyn: what kind of car would you be? kelly as fox.com. the hearts and minds of republican voters in the iowa straw poll, let's take a look back at who has won in the past. george h.w. bush won the very first ames straw poll back in 1979. he finished third in 1987. then in 1995 bob dole and texas senator phil graham tied for the top spot in the straw poll. in '99 george w. bush won fist place, and this year's front runner, mitt romney, won first place back in 2007. even if you come out tops in this iowa straw poll, you may not get the nomination. you know, mitt romney didn't get it the last time around. george w. bush was one of the only folks who actually won the straw poll and went on to win the nomination and then, of course, the presidency. well, again, the republican presidential debate is tonight, folks, it airs right here on the fox news channel. it will be hosted by bret baier and is sponsored by fox news,

the washington examiner and the iowa republican party live from ames, iowa. 9 p.m. eastern time right here on fnc. fair and balanced, as always. make sure you set your tivo if you're going to be out, and in the meantime, catch up on all the candidates by logging on to foxnews.com/politics. an alert, air force one is set to touch down in michigan. president obama trying to highlight a success of his stimulus program in these times of nine plus percent unemployment. an electric car battery plant that expects to employ 500 workers when it's fully operational is his destination. speaking of the economy and jobs, the president is coming under fire now for planning a nine-day vacation at a ritzy place other on martha's -- over on martha's vineyard. reportedly, the place rents for $50,000 a week. that's a lot of dough. is now the right time for that? you know, we have these debates all the time with presidents. you know, they need vacations. they're human beings, as it

turns out, and yet how are the optics of this going to play for him in an election year to be going to the are ritzy joint whe many americans can't even afford to take a vacation right now and many others, unfortunately, 14 million, don't have jobs at all. we're also hearing the white house has a new plan to deal with the housing crisis today. the administration is looking to take foreclosed homes that are owned by fannie mae and freddie mac and to turn them into rental properties instead of reselling them. so what does this mean for the struggling real estate market? is it good news? bring in fox business network's cheryl casone. thanks so much for being here. is it good news? it's an interesting plan. >> reporter: it's an interesting plan, but investors have been doing this for three years, megyn. the white house is a little behind the curven this one -- curve on this one, i'm not going to lie. big real estate investors have been buying up blocks of foreclosed homes since the beginning of 2009 and doing exactly what now the white house is proposing to do which is to take these foreclosed

properties, you fix them up, and you rent them out, and then you wait it out. and when the market comes back, then you sell them. now, jared bernstein who's the former economic adviser to vice president biden, this is something he has talked about for a long time. but, again, many in the market, the big money investors, have been doing this for a long time. there's also a little bit of a moral hazard for taxpayers. the fannie mae and freddie mac gses, remember, we own these guys now be. does a taxpayer want to take the risk of being, basically, a landlord? that's going to be the question because, of course, it's going to have to go through washington, it's going to have to be debated, discussed and vetted. treasury secretary geithner has come out and said we need to do something -- he's right on that one, megyn -- we need to do something to fix the housing market. so it's certainly a debatable idea, but again, the u.s. government, megyn, may be a little late to the party on this one because it's already been happening in the private market for the last three years. megyn: maybe fashionably late.

you know, cheryl, just want to point out to the viewers, i'm feeling happy and that's because i see a big plus sign and 352. yea for wall street. >> yeah. intraday highs. hitting it right now on your show, 356. megyn: thank you. neil cavuto accused me of driving the market down. take that, neil! thanks, cheryl. we are learning more about the end of the so-called dougherty gang. are we now calling it dock erie? it was dougherty for a week, now it's dockerty gang. the three outlaw siblings napped following a hot pursuit and a shootout with the police. maybe lost in the headlines, the ordinary joes who did not think twice about risking their lives to help get these guys. well, we didn't forget. alicia acuna has their story live from denver. >> reporter: hi, megyn. yeah, this is pretty incredible.

we've all heard about this dramatic shootout with the police before the arrests, but just after that car crash and just before the arrests one of the siblings managed to get out of that wrecked car, and he made a run for it to some businesses nearby. at the same time, three highway workers were at a local restaurant. they heard the commotion, went outside and saw a man run out of some bushes toward them. they knew something was up and told the guy, hey, just give it up. the suspect doesn't, here's what happened next. >> we started walking, he turned around and pointed his februaryers at -- fingers at us like a gun, told us to get back. kind of scared us a bit, we didn't know what he had. but once we realized he didn't have it, he started getting in that thick brush, and we knew if he got too far in there, we'd probably lose them. >> reporter: a couple of the men hopped in their friend's truck when they caught up to the youngest dockerty, ryan. there was another confrontation. take a listen. >> he turned his back on me, and

i saw that i had a chance, and i grabbed him. he put up a fight, he flung around, and i grabbed him again and yanked him down to the ground, and he just said, i give up. >> reporter: the dougherty siblings are now in the public, the pueblo county jail, rather. they're set to go before a magistrate right about now to face the first of what the feds say are many, many charges to come. and, megyn, those workers said on "good morning america" this morning that they had some answering to do to their wives and mothers who were not too happy about them tackling some of the fbi's most wanted. megyn: wow. thank you. folks are writing in about what kind of car they'd be. chuck writes, i'd be a dodge challenger; good looking, kind of fat, loves to eat and strong. [laughter] all right, chuck, good for you. well, folks, with our credit just downgraded and 14 million americans still out of work, the question is now being asked, is this a good time for the president of the united states

to be taking a vacation on the vineyard? our political panel weighs in. and up next, security concerns in the intelligence community about the movie being made on the killing of bin laden. why now? why released a month before the election? and a woman disfigured in a violent chimp attack given a second chance at a normal life. we'll show you how. doctors achieved this modern miracle. >> what is the monkey doing? >> he ripped her face off. ♪ and so the conversation turned ♪ ♪ until the sun went down ♪

♪ [ country ] [ man ] ♪ gone, like my last paycheck ♪ gone, gone away ♪ gone, like my landlord's smile ♪ ♪ gone, gone away ♪ my baby's gone away with dedicated claims specialists... and around-the-clock service, travelers can help make things better quicker. will your auto and home insurer... be there when you need them most? for an agent or quote, call 800-my-coverage... or visit travelers.com.

- because it's completely invisible. - because it's designed to help me hear better. male announcer: introducing amp, a new kind of hearing aid, so tiny, it's invisible. female announcer: amp is comfortable to wear and easily removable. amp, the hearing aid for people who aren't ready for a hearing aid. male announcer: call: to find an amp hearing professional near you. only $1,500 a pair. megyn: fox news alert on this reminder. now, we told you about this video exchange that we here at fox news channel caught on tape. it is between mitt romney and some folks on the campaign trail this morning, some voters confronting him on the ground in iowa. we are told that the candidate

handled himself well but that the voters were quite upset about some of his positions, and there was a contentious back and forth. you know, some of these moments can define the campaign, folks. remember joe the plumber? we will have that video up on the screen for you, i'm told now, within the next 20 minutes. so we will play it for you just as soon as we have it in the house, so stand by. well, the making of a movie that will bring the bin laden raid to life is causing controversy in washington. this after reports surfaced that the administration green lighted access to the elite navy seals who took out ubl, green lighted access by the movie makers. the chair of the house homeland security committee, congressman pete king, is demanding that the pentagon and cia investigate whether the movie makers were granted access to classified information which he says would be a no-no. james carafano, a senior fellow and security and foreign policy analyst for the heritage

foundation, and bill harlowe. gentlemen, thanks so much for being here. james, is this a big deal? >> well, you know, on the one side we certainly know you can make a film without compromising sources and methods. sources and methods are the way that intelligence is gathered. they're very, very sensitive because they tell the enemy how you're doing things. he's the only concern d here's the only concern, this administration has a track record of pushing out information which could be sensitive because it fits their political message and also kind of shaping the intelligence. you know, we've seen, for example, recently that the head of the national counterterrorism center was kind of pushed aside because he wasn't onboard with the new count terrorism strategy -- counterterrorism strategy. there's reports they're not looking at intel that doesn't match the message hay want, they pushed out a lot of information on the raid which some people in government including the secretary of defense said, hey, we should be more cautious about

what we're releasing. i don't know if it's a crisis, but i think it's a legitimate thing to at least kind of ask, hey, what's going on here? megyn: how about this, bill, because james raises a good point in that we had admiral mullen saying it's time to stop talking about the bin laden raid, we can't afford to jeopardize the position we have. robert gates making similar comments as well, so some are asking the question about should the administration be talking the movie makers about it? >> >> well, there's no doubt that the congressman has a point that it's important to protect sensitive sources and methods, but nobody knows how to do that better than the cia and the pentagon. there's going to be movies made about that, about the bin laden takedown, no doubt about it. so the question is, do they let the movie makers go out and gather information from whoever they want to, or do they try to help them with it, try to put things forward in a positive way while preventing sensitive

information from -- megyn: and can't they strike a deal, i mean, with kathryn bigelow, the movie maker, you know, behind the oscar-winning film "the hurt locker" saying we're going to help you, but we're not going to reveal sources and meths, and we want to see -- [inaudible conversations] >> professional people can do this, because they do it all the time. and it's always a question of compromise because, quite honestly, what works really good in a movie is normally not what really happened because what happened normally isn't as visually interesting as what's done in a movie. sometimes the military walks away from projects. that's happened before as well. i think we need to be concerned about not the professional people doing their job, it's whether the political people put undue pressure to release information which might not be the right thing to do. megyn: bill, congressman king seems to be concerned that classified information may have been shared. the white house has denied that. is that, can the white house release classified information

to movie makers if it wants to? can it declassify it? is. >> with well, ultimately, they could do so, but they'd be foolish to do so, and i'm sure that they wouldn't because the whistle would be blown on them. people in the cia, people in the pentagon wouldn't stand for it, and if they found out that was being done, that would become immediately public, and it wouldn't help their case at all. this is a good story that can be told without giving away any sensitive, classified information. so i think that's what they're trying to achieve, and it's in the interest of the pentagon, of the cia -- megyn: yeah. and the movie makers say this has been in the works for a long time and covers three presidencies. gentlemen, thank you both so much. >> thank you. megyn: well, speaking of the bin laden movie, does its release -- just three weeks before the presidential election -- violate any election laws? is that fair to do? some say it's sort of a king maker for president obama. that's on the docket in today's kelly's court. plus just about 15 minutes

before we expect to have the sharp exchange with mitt romney going head to head with some voters upset with his positions on social security. as that comes in, we'll put it on. stay tuned. probiotic cap a day helps defends against occasional constipation, diarrhea, gas and bloating. with the strains of good bacteria to help balance your colon. you had me at "probiotic." [ female announcer ] phillips' colon health. or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today.

>> i had hoped to be able to continue the work that the citizens of my district elected me to do. unfortunately, the distransthat i -- distraction that i have created has made that impossible, so today i am announcing my resignation from congress. >> yeah! bye-bye, pervert! megyn: it's only been two months since new york congressman anthony weiner resigned his seat, but there has been a big change in his district, a district where democrats outnumber republicans by three

to one. a new poll shows the democratic candidate is leading the relin by only six -- republican by only six points. laura ingle with more. >> reporter: hi, megyn. this is turning into a surprisingly close race for new york's ninth congressional district and the new poll numbers show this could be a potential pickup for a gop in a seat never before held by a republican. state assemblyman david weapon on is holding on to a lead over republican bob turner. the margin of error on this is 4.4%, so this is pretty much a dead heat. this is turner's second run for the ninth district congressional seat. he lost out last year, but now his campaign spokesman says the media executive has a real shot at winning. bolstered by a recent endorsement from ed koch, this may be the tipping point in the election.

>> i think that voters are probably more concerned about issues of the economy and social service cuts, but this could play into those moderate voters. >> reporter: a spokesperson believes this latest poll confirms that his promise to protect medicare and social security is resonating with voter showing constituents opposing cuts to entitlements 72-24%. the seat is vacant because representative wiener resigned in june after becoming embroiled in a scandal. the district is located partly in brooklyn and partly in queens, both new york city suburbs which shows registration rolls of four democrats to every one republican. the special election is slated for september 13th. the seat may disappear when new york is expected to lose two of its 29 congressional seats during redistricting. megyn? megyn: thanks, laura. hey, we all want some r and

r, especially in the month of august, but should the president be planning a ritzy getaway at a time when the markets and economy are going haywire? >> on the question of martha's vineyard, you seemed to dismiss the idea that there was an image problem for the president. megyn: and there was more of that at the white house press briefing. coming up, we'll have a fair and balanced debate. plus, it was an attack that horrified the nation, a woman terribly disfigured by the chimpanzee that she loved. just ahead, the miracle her doctors were able to perform. and well before tonight's big debate in the hawkeye state, the candidates have been flooding iowa's airwaves with ads. who's got the right message and who does not? frank luns knows, he joins us live. >> back in washington politicians are looting the treasury and bankrupting our nation, and barack obama has driven our economy into a ditch. someone needs to say no. i voted against raising the debt limit because it's time to balance the budget. let me tell you about a very important phone call i made.

when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses...

not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket. these are the only medicare supplement insurance plans... exclusively endorsed by aarp. when you call now, you'll get this free information kit... with all you need to enroll. put their trust in aarp medicare supplement insurance. plus you'll get this free guide to understanding medicare. the prices are competitive. i can keep my own doctor. and i don't need a referral to see a specialist. call now to get a free information kit. plus you'll get this free guide to understanding medicare. and the advantages don't end there. choose from a range of medicare supplement plans... that are all competitively priced. we have a plan for almost everyone, so you can find one that fits your needs and budget. with all medicare supplement plans, there are virtually no claim forms to fill out. plus you can keep your own doctor and hospital that accepts medicare. and best of all, these plans are... the only medicare supplement plans endorsed by aarp.

when they told me these plans were endorsed by aarp... i had only one thing to say... sign me up. call the number on your screen now... and find out about an aarp medicare supplement insurance plan. you'll get this free information kit... and guide to understanding medicare, to help you choose the plan that's right for you. as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. megyn: it is 132 time here in the east coast napped just a few hours the iowa gop debate will be in full swing, eight white house hopefuls will square off and we just got in video of minnesota governor tim pawlenty, shaking hands and checking out the stage. come on, get over in front

of your tvs, folks. look at him walking! [laughter] >> anyway, he's got to be a little nervous. right? they all have to be a little nervous. you heard stierwalt say this could be a make or break night for some of these guys and gals, candidates herman cain and ron paul are expected to take part in a walk-through, they get to kick the tires and see it it's comfortable. that kind of thing is helpful, to see how the stage is set, many of the candidates releasing political ads ahead of the debate and ahead of saturday's straw poll. so how are voters reacting to those? pollster frank luntz joints me live on that, straight ahead. a daring rescue after a marine corps jet goes down in the pacific ocean, it happened off the coast of san diego. two crew members from the air station are safe, but now the question is what caused this accident. trace gallagher, live in our west coast newsroom with more. trace. >> reporter: megyn, this

base was -- jet was based out -- out of the miramar, station, home of the movie top gun, an f-18 hornet, a two seater, flying a training mission out over the pacific, it was routine, it was flying in tandem with the other jet when the other jet lost contact with the fa-18, the jet went missing around 10:30 last night, the coast guard, marines, navy, scrambled their rescue teams, as you might imagine. this was like finding a needle in a haystack. one hundred square miles, and it was pitch black. they searched for hours. finally, at 2:30 in the morning, the pilot and the weapons systems officer were both found in the water. they were 85 miles southwest of san diego, 35 miles off the coast of mexico. they were both apparently in good condition. they were flown to a san diego hospital. they are now listed as stable. again, this is one of the very few military incidents in recent months that has had a good outcome, megyn.

the plane, by the way, is lost. but the pilots are okay. mig that's the most important thing. before i let you go, what kind of car would you be? >> apparently an escalade, kind of square, smooth, but likes to drink! megyn: good as roy from pennsylvania! he'll be 71 on saturday so he'll be a mercury, since we're both due to expire soon! thank you trace! >> >> reporter: you bet. megyn: with our credit just downgraded and 14 million americans still out of work the question is now being asked, is this a good time for president obama to take a 9-day vacation on the vineyard? here's how the white house responded yesterday to multiple questions about the president's break: >> you said the president will not rest until the joblessness in the economy is worked out.

the president is obviously going on a vacation and i'm wondering, is there any concern about the impression of the president going to martha's van yard for nine or ten days might leave with the american people? >> i don't think the americans out there would begrudge that notion that the president would spend time with his family. >> it seems to dismiss that there's an image problem. i've seen you saw richard companience saying as the stock market was dropping heavily last week, his quote was the president was whooping it up at his birthday party and he did not seem to care. >> it is the nature of the job that criticism comes in. megyn: well, we wanted to hear both sides on this, fair and balanced, so we're joined by ben ferguson and rob thompson, radio talk show host. we always hear this about presidents, doesn't matter

whether you're democrat or republican, but that doesn't mean that it's never valid, and the question now is, is this criticism valid? ben. >> yeah! look at the unemployment rate. look at the fact this president, since he became president, has played golf on average about once every ten days. look at the fact he's gone to hawaii more than i think i'll probably go in my entire lifetime just in the last year and a half, plus in rio dejanerio j. last year and this is a president, he doesn't understand when there's a crisis, he's supposed to lead. it's the same guy that said 50 days into the bp oil spill, i'm going to find someone's a to kick, day one, two or three, or maybe he's given up saying i'm a one termer, i'm going to live the dream while in office. i'm not sure. megyn: he's gotten criticism before when we were attacking libya and the japanese suffered the tsunami, he went to rio and was dancing with the locals down there and there have been other incidents that people have accused him of being disconnected with the people and the reason

they're saying this is such a disconnect, it seems from what i've read, it's not so much the vacation as it's a vacation in martha's vineyard where the rental is 50 grand a week and americans are hurting right now and they're thinking he can't relate to me at all. >> well, that's an absolute fallacy, first of all, about being in rio dejanerio and dancing. that was a trade mission, that was to build jobs in america. as far as the -- >> i want that job, then! >> well, go ahead and run! because you're going to go ahead and lose. right now america understands the president needs a vacation and whether in the white house or in martha's vineyard or wherever, are we assuming he does not have control of what's going on? keep in mind, while he was there, the very senate he was dealing with wasn't allowing him to get anything done. he capitulated to a lot of things that as progressives, allowed it to happen while republicans didn't agree. so while he goes on vacation -- >> here's the thing, if he's so weak as you're claiming

-- you're saying when he's there, he couldn't get anything done. >> he's got a do nothing congress. >> you're telling me now that everyone in the country is unemployed, including those that are hurting, you're saying your president, barack obama, this liberal president, literally cannot help you, therefore, he should go on vacation because he can't do anything while he's in washington, so let him have a good time, that's what you're telling me? >> no, what i'm telling you is the very same congress that has just adjourned, left the faa in a lurch, without taking care of their problems, we had to drag their republicans butts back into town to vote for it, to get this into the system. megyn: let me ask you, i really don't think the average american is going to begrudge president obama taking time off. the man has one of the toughest jobs in the world and we want the leader of the free world to be well rested and have time to reflect. he's only human, he needs rest sometimes with his family. but the question is, is there a problem with the vacation he has chosen, because there was a story

about how president clinton was going to go to martha's vineyard and dick morris, fox news contributor, told him don't do that, it's not going to look good, you want to go to jackson hole and look at wrangling cattle and the backlash is we know what you're up to, we're not stupid. >> but it's a lack of urgency on the part of the president of the united states of america and it's saying i'm the president, i can do whatever i want to, at the same time, trying to act like he's in charger feeling the pain of the american people. when you've got a stock market as volatile as it is right now, when you've got issues where the president didn't lead for months on end on trying to get a debt deal and came down to the wire because of the lack of leadership, in rio j, hawaii, all in a nine-month period, i've got a problem with this american citizen when there's a lot of people out of work right now and i think most americans agree and the president's approval rating is an all-time low because they realize, he's not really leading right now. megyn: go ahead, rob. >> unfortunately, ben, at an all-time low he still leads

any republican candidate out there so we can discount that right there. >> 40. >> still, he has absolute control. according to your pollsters. i can certainly pull out any poll to show that the democratic candidate, whatever, name the democrat, is leading any republican. as of right now the republicans are the party of no, everybody understands they're refusing to tax the wealthy and make sure that the job creators as he wants to call them, that they are not creating. so the -- >> megyn: okay, guys. >> as the leader, he is absolutely taking care of business. megyn: got to leave it at that. >> the leader on vacation. >> i'm going on vacation. >> good to have you back! >> i'd be a pickup. >> how about you, ben? >> at golf, once every ten days, i'm happy with that. >> megyn: ben didn't see the top of the show. we're still taking your e-mails on what kind of car would you? real quickly, this is from mark a. '69gto, a old car

but cooler than anything out these days and it would be inpolitically correct. new details out on which states, states and local municipalities are most at risk for a downgrade of their own. and look at how our debt troubles are playing on the campaign trail. >> back in washington, politicians are looting the treasury and bankrupting our nation, and barack obama has driven our economy into a ditch. someone needs to say no. i voted against raising the debt limit, because it's time to balance the budget. >> megyn: does that resonate with the voters? frank luntz, right after this break. plus a chimp attack victim those off her new face, two years after being viciously mauled by the animal. people thought she was dead. we will show you the amazing pictures. >> i tried to shoot him, i tried stabbing him, and he hurt them, too. so he's going to attack anybody. i can't get out of this.

>> sandra, just stand -- >> he's after me. >> just stay in your car. lock the doors to your car and stay there with me.

megyn: tonight's gop debate in iowa could make or break some candidates but even before tonight's big event which you can only see on the fox news channel, the ad war has been in full swing. so which ones are working and which are not? who better to ask an pollster frank luntz, author of so many books, including "words that work" so he's the expert. frank, thanks so much for being back with us. we have a few we want to get through quickly. let me start with a brief clip from michelle bachmann's ad. >> back in washington politicians are looting the treasury and bankrupting our nation and barack obama has driven our economy into a ditch. someone needs to say no. i voted against raising the

debt limit because it's time to balance the budget and pay back the down. i mean -- >> megyn: that's a sample. what do you think? >> her phrase, "looting the treasury", it's state at the cameoo straight at the camera, she's giving a speech, you know where she really stands and she's using a graphic termor terminology, looting the treasury. make no mistake the number one attribute americans are looking for is someone who's going to fight against washington. i think it's an effective ad. megyn: what about this romney ad? there was a political report saying if the president's strategy in the absence of anything else is to kill romney, politically, he's got to take out romney, including by personal attacks, romney responds almost immediately with this: >> for stability in our public districts, because only a more civil and honest public discourse can help us face up to the challenges of our nation.

megyn: what do you think? >> i think that barack obama is going to regret the day that his staff made that comment, kill romney? what kind of election cycle is this? we're suppose to choose between candidates with different principles and visions and values, we're not supposed to kill your opponent. i think romney was smart to get that ad up, i also think it's effective because it articulates, it demonstrates what the american people don't want, with this kind of vicious politics. why can't we treat each other with stability. megyn: there was color to that where he said really his strategy, and we saw some of this from david axelrod and other advisers, that they're going to paint romney as, quote, weird and that he's mormon, but the white house is pointing to a couple of examples of romney behaving in a weird manner. does that resonate? >> it doesn't resonate. mitt romney is a successful businessman, mitt romney was a successful governor,

leaded -- headed the olympic committee. there's nothing different about him and the idea they would do that smacks of religious bias and i think particularly the obama people ought to be careful about the words, the language they use because it will come back to haunt them. megyn: how about tim pawlenty, he's expected to have a big night in items of his stakes, and he puts this out. >> i've got to say i'm very amused when i start hearing comments about well, the president needs to show more leadership on this. let me tell you something, i've been here. >> most people do not sit around the kitchen table and analyze unemployment numbers. >> i will be held accountable. if i don't have this done in three years, there's going to be a one term. >> leaders -- >> megyn: >> i think that's the best ad, quite frankly, of the campaign against romney so -- of barack obama so far, and the reason why is that it uses his own words against him. there's a message for republicans who are here in iowa. they don't want to hear

generic attacks. they want evidence. they want to hear barack obama's words, they want to see whether he kept his promises and they want to see the evidence behind it. those are the three rules. that ad not only has the three rules, it's incredibly effective. megyn: that's how you win in a courtroom and apparently how you win in politics. frank lunz, thank you sir. >> and it is great to have you back. megyn: thank you very much, we'll see you tonight after all the drama. don't forget, everybody, tonight is the gop presidential debate, it is hosted by our own bret baier, host of "special report", it begins at # o'clock p.m. eastern time on fnc. new developments in the dirs appearance of an american woman in aruba. why investigators are no longer searching for her, and what her family is saying about that. and london burns. riots, stretching city to city across england. but could the same thing happen here in the united states, given our economic situation? ?ç

megyn: take a look at this, a new face for a connecticut woman disfigured in a brutal chimpanzee attack two years ago, her injuries were so severe she was barely recognizable after the incident, she required a full face transplant, the first ever performed in the united states, the chimp destroyed nearly all of the natural facial features. doctors are now revealing the result of some 20 hours of surgery. wow! look at this. they hope the operation will restore her ability to smell, eat normally, speak clearly and kiss her loved ones. wow. crews in aruba are no longer actively searching for a missing american

woman, robin gardner disappeared while visiting the same aruban city where natalee holloway was last seen in 2005. police detained the traveling companion. trace gallagher has more live from the west coast newsroom. >> reporter: we're getting more information on the man held in connection with the disappearance of robin gardner, he is 50-year-old gary giordano, we're now learning he has a fairly lengthy record and apparently it turns out that we have confirmed he has an allegation of domestic abuse in both his ex-wife and former girlfriend have gotten restraining orders against him at one point in time. the former girlfriend says that he was violent and erratic. listen to her. >> so he was like following me, stalking me, and it freaked me out. and i may have reported him. normally i would do that -- i think i did but i'm not

really sure. >> reporter: she met him on match.com, as well as gardner did. robin gardner's on again, off again boyfriend says during her trip to aruba she posted a quote on facebook saying this sucks and e-mailed him three hours before she disappeared saying i love you. he doubts that gary giordano's story where she went snorkeling and disappeared. listen: >> i just don't think she was snorkeling. i feel in my heart that something happened at this person's hand. >> reporter: again, no witnesses, no physical evidence that a crime happened here. the lawyer says for giordano he is totally innocent, megyn, but still being held because of inconsistencies in his store. megyn: this is a fox news alert. we just got in this video from a confrontation on the campaign trail, a group we're told from a liberal think tank ambushing mitt romney on the campaign trail

in iowa. the entire tape and stephen hayes, who was in iowa, up next. here's a little preview of what we've seen. >> no, i came here to speak and you get to ask a question. hold on a second. speak. hold on a second, let me speak.

megyn: this is a fox news election alert. drama on the campaign trail, in advance of tonight's big debate, 9:00 p.m. eastern, right here. we now have our hands on the tape of an altercation between republican presidential candidate mitt romney and what we are told is a group of liberal activists in iowa. a group of -- a group of protestors from a liberal think tank called iowa citizens for community improvement. we're told that think tank, members of it, set up at a romney event at the iowa state fair, that the acti vies got there very early, positioned themselves right in front of the crowd and got a total of four questions in to romney. watch what happened: >> we're not going to do

that. and so -- i'm glad you're on social security. hold on just a moment. hold on just a moment. hold on just a moment. you know what? i can let you speak in a moment. >> you came here to listen to the people. >> no, i came here to speak and you get to ask the questions. hold on a second. hold on a second. i wish to speak. hold on a second. i wish to -- hold on a second. >> [chanting] >> i'm on social security. we're also on medicare. a tremendous program. >> let me finish. >> what are you going to do to strengthen social security, medicare and medicaid, without cutting benefits? >> let's get his answer. >> let's get his answer. >> you've had your chance. anything else you want to say? >> well, i want to see what you're going to say! >> the way this is going to

work -- the way this is going to work, is you get to ask your question and i get to give my answer. if you don't like my answer, you can vote for someone else. but now it's time to give my answer. you ready for my answer? i'm not going to raise taxes. that's my answer. i'm not going to raise taxes and if you want somebody that is going to raise taxes, you can vote for barack obama, but let me tell you what barack obama is doing. barack obama is killing this economy. barack obama is why 25 million people don't have jobs and can't find jobs. >> [chanting] >> by the way -- >> next question. do we have another question? i've got to get over here. yes, sir. you've had your turn, i've had my turn. >> -- when governor of massachusetts you closed corporate loopholes to billion the revenue and the state budget. if you were elected president would you do the same thing and look at the revenue side of the equation to balance the federal budget. >> the question is, as governor of massachusetts, i

closed loopholes on big banks that were abusing our tax system and would i do the same as president. let me tell you, let's describe what is a loophole and raising taxes. in my opinion the loophole is someone that takes advantage of a tax law that wasn't intended by legislation. megyn: that seen on the train exail comes just hours ahead of a key debate where the presidential candidates including mr. romney will face off. fox news contributor steve hayes has the front row seat for tonight's event and is a senior writer for the weekly standard. steve, wow, fireworks on the campaign trail. it kind of reminds me of the town hall meetings we saw a couple of summers ago, where people were so worked up and went to these events and got fired up in the face of various politicians, and you know, was it a real substantive exchange, was it something that was playing out for the cameras? you tell me, what do you think? >> you know, it's interesting. it's been sort of hard to capture exactly how great

the centering here is on the ground in iowa. but i think that that video surely demonstrates it. and the interesting thing for mitt romney, as a guy who's known he's got a reputation of being a bit stiff, he doesn't react spontaneously the way that one would want him to, this was a wrap on him back in 2008, he think he handled that quite well. he had i thought sharp comebacks, he was respectful but forceful, he pitch on the dollars in the way that i think would be beneficial in several hours before a republican debate by talking about raising taxes, and that really is the alternative when you're looking at how to reform medicaid, medicare, social security, if you're not going to reform those programs fundamentally, then you are going to have to raise taxes. i thought he pitch on the dollars quite well. megyn: how interesting do you find the setting? when i look at that video, as our viewers have as well, you have romney, he's standing on some bails of hay, he's out there in his golf shirt, he looks short of -- sort of more relaxed.

we're used to seeing mitt romney buttoned up, corporate looking, and he's got the american flag flanking him. i don't know. he gets attacked and stands up to the guy -- not attacked but the guy is shouting questions at him and he handles himself pretty -- he keeps his poise. is it something that could wind up becoming a defining moment for him? >> it could be. you never know. you look at campaigns and when you read the history books, they're filled with the series of defining moments as you suggest. this could be one of them. he handled this in a way unexpected and any time a presidential candidate does something in a way that defies the narrative about him or the stereotype about him or her, you're likely to have to see the kind of moments that people are going to be talking about quite a bit. it's certainly something that people across iowa are talking about and it will likely be something that people focus on and say gosh, maybe this mitt romney guy wasn't the guy we thought he was back in 2008. mig mig maybe he's not the jag wire!

maybe he's a pickup truck! i don't know. let me ask you this, steve. now there are reports from our producers on the ground that the folks doing the confrontation, the protestors were from the iowan citizens for community improvement, a liberal think tank, they got there, positioned themselves in front of the crowd, they got a few questions in to romney. do you think we're going to be seeing more of that, people who have a defined agendas opposed to just your average citizen showing up at these events perhaps -- this is pecklation on my part, to try to get a moment on camera. i referenced the joe the plumber moment with barack obama during the '08 campaign. do you think we're going to see more folks try to have their own sort of joe the plumber moment? >> absolutely. i think you're going to see groups, individuals, outside agitators, trying to get presidential candidates to say something they otherwise wouldn't say in a spontaneous -- spontaneous exchange like the one in 2008, and you're also going to see, i think, if you've got a candidate doing a parade or walking around a

neighborhood, people will bring their own cameras. the outside cameras will whip out their cell phone cameras, try to capture a confrontation on camera and put it on youtube for the world to see. i think we're going to see a lot more of that kind of campaigning, gorilla-style campaigning, this year than we've seen in the past with the advent of all this new technology that allows the average citizens to engage in that. megyn: you can learn a lot about a candidate in a moment like that, perhaps even more than in an event like tonight which is very formal and structured, and sort of catch somebody off guard, sometimes you see i guess more of what they really are, so those moments are interesting, which is why we show them when they come in, steve hayes, we'll also be watching the more formal exchanges tonight. we look forward to seeing you there. thank you very much, sir. >> thanks megyn. megyn: folks, do not miss tonight's debate, it is cosponsored by fox news, washington examiner and iowa republican party. you can feel that man's

passion. he works for a liberal think tank, fine, those are the causes he also in. you can see his passion and you can see mitt romney's passion in response and those who were there and favored mitt romney, you're going to see more of that tonight. folks, it's the presidency on the line, they want barack obama's job. the stakes really could not be higher, and this really is a moment that could knock several candidates out of the race, including the top candidates who are now in the gop field. it starts tonight, 9:00 p.m. eastern, right here on fox, bret baier is the moderator, and fox news has the best political coverage and and analysis on tv, fair and balanced, before and 56 -- and after the debate. and for more political coverage, go to fox news cott comb -- foxnews.com/politics. an alert for you now, awaiting remarks from president obama object the -- on the new jobs numbers, right now the president's motorcade is about to arrive in holland, michigan, he's touring a factory there and is expected to talk about job creation. michigan is, of course, in desperate need of jobs, that

state struggling with an unemployment rate at 10 1/2%, one of eight states with a double digit jobless rate. the president will be speaking in a short time and we will take you there live when we hear it. brand new developments in the botched government gun tracking program in mexico, known as operation fast and furious. and it centers on brian ter yerk the border patrol agent, murdered by one of mexico's most notorious drug cartel, a gun at the scene traced to operation fast and furious and now terry's family recently testifying at a hearing investigating that controversial program. >> he was killed while on duty as a u.s. border patrol agent. he died not in iraq or afghanistan, but in the desert outside of rio rico, arizona. brian did ultimately come home that christmas. we buried him not far from the house that he was raised

in just prior to christmas day. megyn: well, now the department of justice is trying to block terry's family from receiving crime victim status. what does that mean? william la jeunesse is live in los angeles with more. william. >> reporter: megyn, the u.s. attorney's office in arizona ran fast and furious, the program that put thousands of weapons in the hands of the mexican cartels, including the one used to kill brian terry. well, now that same office is trying to deny the family the right to speak at the sentencing of the man who bought the gun allegedly used against him. >> i just was flabbergasted. i just -- i didn't believe it at first. >> reporter: brian terry died in a shootout near the mexican border, his family wants all those responsible brought to justice, from the man who allegedly fired the gun to the one who bought it. >> wur number one -- our number one goal is to pursue

the prosecution of all the killers of brian. >> in a surprise move this week, arizona's u.s. attorney opposed a routine motion to list the terry family as a crime victim. >> it's mystifying to see the government try to deny the family of this fallen hero the basic respect and compassion that they are entitled to as crime victims. >> in a motion u.s. attorney dennis burke says the family was not directly or proximately harmed by the illegal purchase of the murder weapon, that the real victim is not any particular person, but society in general. yet, earlier this year, when indicting gun buyers, burke suggested the opposite. >> guns can be found in mexico sometimes within 24 hours, to be used by drug cartels. >> some believe burke has a conflict because he directed the operation that led to terry's death. >> you have to wonder whether the government's efforts to deny the family the status as crime victims is part of a strategy to avoid legal responsibility for some of the tragic mistakes of operation fast

and furious. >> reporter: and those mistakes could lead to a wrongful death claim against the federal government, including burke himself, which is why, megyn, some see a conflict. the unusual part say the prosecutors is here this -- is to hear the argument from the defense attorneys but not the u.s. attorneys. megyn: folks, we have breaking news from moody's credit rating agency, new details on which states and local cities are most at risk for a downgrade. we're not talking about america, we're talking states and cities. plus we're 48 hours away from the results of the iowa straw poll this weekend. and, if you think it is not a major factor in the race for president, just hit the rewind button on the bush campaign from 1999. what am i talking about? bush won the iowa straw poll and we all know how that wound up for. karl rove next on who may go on and who may no. plus i'm going to ask him about this romney tape we just saw. >> plus deadly riots on the

streets of our closest ally across the pond, today calling on a major american city for backup in battling the violent gang.

megyn: this is a fox news election alert for you, we're now less than seven hours away from the critical gop presidential debate in iowa. it is a pivotal event that could very well shape this weekend's iowa straw poll and if you think it's too early for the straw poll to wind up picking winners and losers in the race overall, think again. august 13th, 1999, then-texas governor, george w. bush, front and center in the hawkeye state, he went on to win the iowa straw poll, beating steve forbes by a healthy margin, a little more than a year later, he was elected president of the united states. karl rove was the architect of that campaign. he's the former senior adviser and deputy chief of staff to president george w. bush and is now a fox news

contributor. thank you very much for being here. "the washington post" has a piece out today that is called -- that calls this the most important 72 hours of the 2012 presidential race so far. do you agree? >> i think that's right. and it's because of the odd nature of the 2012 race. and that is that we, rather than having candidates out there for a number of months all organizing and working in iowa, we have some candidates who have been at the traditional method of deeply organizing in iowa, and getting ready for the straw polls, and other candidates who have -- the frontrunner, mitt romney, is not participating in the straw poll, and we have another candidate who's about to center the race deliberately after the straw poll, namely texas governor rick perry. you're right, this is a consequential moment in an odd campaign that's rolling out in a different fashion than we're used to. megyn: who truly -- we had chris stierwalt on earlier tonight, he believes michelle bachmann has the

most to gain out of tonight's event or lose, conversely. what do you say? >> i think that's probably a good analysis. let's step back, though, and just take a broader frame of this thing. traditionally, the iron law of iowa politics has been that you have to be among the top three coming out of the straw poll in order to be competitive in the caucuses in february. and you know, lamar alexander was in the in -- not in the top three in '99 and shortly thereafter, withdrew from the race, but i think this may be different. the first thing is, again, we've got a candidate, the frontrunner in the race, who's not participating, romney, we've got another candidate who's about ready to enter the race, in fact will enter the race the same day of the straw poll but will do so by making his intentions known in south carolina, rick perry. sarah palin may or may not enter the contest. megyn: she's showing up at the iowa state fair but not throwing her hat in the ring. >> that's right. so i think we may end up -- if four or five people are

pretty welcome packed together there may be a bigger number of tickets out of the straw poll to be competitive in the caucuses in february. the other thing that's at play here is we don't have a lot of partisans here, that is to say, we don't have a lot of people that are strongly committed to their choice. we have a boom for herman cain, he grows in the poll and declines, we had a boom for donald trump in the polls and declined, we had a boom for bachmann that appears to have settled down and maybe with the appearance of rick perry, so we have a fluid situation where people are watching the results and watching how candidates conduct themselves during events like this, the debate and straw poll, the speeches, activities on saturday, to judge how good a candidate they are and this may have a bigger impact on drawing people to somebody who performs well, which is why mitt romney probably got himself some points today. hig mig i'm going to talk to

you about that in a minute. we're going to hold you over the breaking and talk about the romney moment, in case folks missed it. before we get to that, does somebody need to have a break out moment, does somebody like a pawlenty -- i don't know, romney is the frontrunner, bachmann, she's up there, does somebody like palent -- pawlenty or bachmann need to put themselves on a limb so maybe they are memorable and catch attention? >> look, you always want to do that in a debate. you always want to leave a strong impression of who you are, but it's hard to do when you've got eight candidates, about a dozen questions, probably, the format is going to allow literally a few minutes for everyone to share who they are and what they're about, but the general impression that people have at the end of the debate, particularly framed in the opening minutes of the debate become important to determining whether or not the contest as loose as this one is, how candidates fare, so yeah, absolutely, seize every big high profile moment you can to score points. but ironically enough, and

we're going to come back to this, spontaneous moments like romney had today are more important, or spontaneous moments inside a debate, the famous debate in 198o. for example, in new hampshire, bush senior beats reagan in iowa, they go to new hampshire, reagan is desperate for one debate, the debate begins to deteriorate, reagan grabs a microphone and bellows out i paid for this microphone, mr. green, the guy was mr. breen, but it was such a spontaneous moment and so powerful,ba people said wait a minute, he's a leader and he's in charge and he cemented his reputation and he went on to win the new hampshire primary. megyn: we're going to ask you more about that subject after this break. as we mentioned to viewers, we did see real drama at the state fair with mitt romney and with folks that are said to be from a liberal think tank. i'm going to ask karl about this right after the break. >> no, i came here to speak and you get to ask a

question. hold on a second. hold on a second. i wish to speak. hold on a second. i wish to -- >> [chanting] ñwkó

megyn: it is a big dmai iowa, and in advance of tonight's big debate we saw some fireworks at the iowa state fair, where some members of we're told it's a left wing think tank, apparently there a different names, one is scrap the cap, in any event, confronted mitt romney on the campaign trail and we saw this: >> no, no, no, i came here to speak, and you'll get to ask a question. hold on a second. hold on a second. i'll let you speak. hold on a speak. let me -- hold on a second.

>> [chanting] >> social security -- >> [chanting] >> just a minute. just let him talk. let him talk. go ahead. >> social security. >>ing ahead. >> we're also on medicare. >> good. it's a great program. we want to keep them. let's let him finish. let's let him finish. let's let him finish. >> what are you going to do to strengthen social security? medicare and medicaid? without cutting benefits? >> all right. let's get an answer. let's get an answer. okay, you've had your chance. anything else you want to say? >> well, i want to see what you're going to say! >> [laughter] >> the way this is going to work is that you get to ask your question, i get to give my answer. if you don't like my answer, you can vote for someone else. but now it's time to give my answer. >> [applause] >> you ready for my answer? i'm not going to raise taxes. that's my answer. i'm not going to raise taxes. megyn: it went on from

there. you know, karl rove, who's my guest again, rejoining me, we're getting a lot of e-mail on this. you talk about moments on the campaign trail, here's an e-mail from a woman named joyce, i've been feeling sick about the candidates for the gop, romney's handling of the situation this morning gives me hope. lots more just like it. >> yeah, look, in a campaign, there come moments, and you can never prepare for them, but in retrospect, we look at them and we say people look at how a candidate handled himself or herself in that moment and said either they're up to the job or not up to the job of being can dairnghts or i'm comfortable seeing them as president or not comfortable seeing them as president. now, i'm at a disadvantage. i'm hearing the exchange. i'm not seeing it. and that is a disadvantage. megyn: you got to see it. he's in a golf shirt and jeans. >> casual? >> megyn: on a bunch of hay, it's ary relaxed setting and lots of real folks standing around him. >> and it sounds like these people are sort of out of control, and he calls them

down, and he treats the guy with respect, gives him a chance, allows a moment of levity, then gives his response, and then moves on, and look, this is going to serve romney well, if it looks well. now t. sounds good, but remember, the people who listen to it on the radio in the 1960 presidential debate thought nixon won, the people on the television thought kennedy won. megyn: romny doesn't have -- he's not losing his composure facially. but i got to ask you, your guy george w. bush had a moment, and he was actually a democrat or leaned -- and dennis miller said he leaned left until he saw george w. bush with a mega phone and he had an unscripted moment that made americans see him in a different light. i don't know, could something as small as this turn into something at least as significant as that was? >> it's not going to be that significant, as that symbolic moment was, but could it do a lot of good for romney, yes. look, it's a funny thing, iowa has a strange history

of these nutty little groups of left wingers. in fact i spoke at the university of iowa, and a woman who was in her 80s, was brandishing plastic handcuff, trying to arrest me, she was accompanied by a young kid who was probably in his late teens, early 20s, six months later i spoke in demoines, half way across the state, the woman showed up, brandishing her plastic handcuffs again, got arrested. so candidates, once you start this dynamic, it's hard to stop. i wouldn't be surprised if we didn't see in iowa and other states left wing groups try to beard the candidates. i thought more important was the way he handled the second questioner, he had a trick question designed to get romney to say in favor of i'm in favor of raising taxes and romney made the distinction between closing loop homes and the tax code having legitimate purposes of deductions and credits for businesses, and you know, i thought that was showing composure, because look, he's just come through

this heated exchange, and now comes a guy out of left field with a trick question and romney quickly grasped it and diffused it as well. megyn: and because you haven't seen it, it is the same guy asking a couple of questions. but i just want to say for the record that that little 80 year-old lady who was trying to harass you, karl, we've spoken about this and nana has told me she's very sorry about that! >> she has? i had no idea! megyn: just kidding. nana doesn't harass anybody. nana never harasses anybody. except my mom from time to time! karl, thank you. >> there we go. you bet, thank you megyn. megyn: folks, they seem to come out of nowhere, violent riots shocking england and the world. could we see the same thing in america in the future? an important debate, fair and balanced, next.

megyn: fox news alert, what could be the next financial shoe to drop on america's ailing economy, moody's investor service, that's another credit rating agency like the s&p, now warning that 162 local municipalities, including five state bottoms, about the possibility of a credit downgrade. all right? now we're talking more at the local level, instead of at the federal level. and taxpayers would likely foot that bill. moody's telling at least ten other states that they are safe for now. elizabeth mcdonald has been doing great reporting on this this morning, she's got the story from fox business network.

liz, what does this mean? >> what this means, if any state or municipality gets upgraded, megyn, that means that state or local government has to offer more in the way of yields or interest rates on the bonds offered to investors because those bonds they're basically borrowing for the market are deemed not as safe as aaa, meaning they're more risky, so moody's did as you point on the -- >> megyn: what does that mean for ma and pa homeowners? >> that's a good point. what that means is their property taxes could go up or other state taxes could go up or spending could go up in that state, which affects -- which effectively means their own tax bills could go up, meaning the taxes could go up to cover the higher interest costs on those bonds, megyn. megyn: is this the kind of thing where you can throw the bums out if you don't like the property taxes going up or is this something that if they get hit with a credit downgrade, they get hit and the interest credit and numbers are going to go up? >> it is an issue if you are

aware of what's going on that you could throw the bums out, but as you pointed out, megyn, there are five states that moody's says are safe for now, and these states, though, interestingly enough, megyn, rely on federal financing for various programs. the states are new mexico, virginia, maryland, south carolina, and tennessee. now, new mexico, virginia, and maryland have a lot of federal contracts, they've got a lot of federal employees, and south carolina and tennessee, these are the -- i'm sorry, they're not safe, these are the ones vulnerable for a downgrade. they rely a lot on medicare financing and other federal finance, so these five states, let me reiterate and correct myself, these five states are most vulnerable to a downgrade by moody's because they get a lot of federal funding and in an age when there's fiscal austerity at a federal level, moody's is concerned these states could see a downgrade. megyn: it just keeps on coming, liz! thank you. >> sure, delighted.

megyn: with global economies tetering on the edge, there are new questions about the riots we've been seeing in england this week. there was looting, vandalism, businesses burned in london, several other cities over the last week or so. it started in london with an anger over police shooting. but it soon became a free for all that seemed to feature a lot of people saying they were angry about the economy and social service cuts and other related issues. raising the question, could we see this here in the united states? let's bring in our panel, denise al bers, parenting expert, cofounder of moms in the city.net, mark stein, author of after america, getting ready for armageddon. yikes! also a columnist at the national review. and susan sullivan, ceo and cofounder of it's your biz.com. we've got a small business own e. a general big brain, and we've got a real person with real, you know, skin in the game as we call it. so the question is, can we see what's happening over in london happening here and

are we already seeing it, because it's interesting that the narrative that's coming out, some folks on the right are saying what we're seeing over there is about entitlements and entitlement nation, and people, you know, how it failed, and then some on the left are saying no, it's about the wealth divide, the wealthy are getting wealthier, the poor are getting poorer and they've had enough of it. mark, what say you? >> i don't think they argue it out there. i think these are the children of dependency, the children of entitlements, the children of stimulus. these guys are born in the early '90s, marinated in stimulus, their entire lives, they have no need to work, they have little they want to accomplish except concrete for windows and steal new electronic toys. i think that the commentators have done their best to eemph this into a social cause but it isn't, it's about the dead zombie husks you get. i mean this! the real crime about welfare

mentality is not just the waste of money, but the waste of lives, and in these flows leaving these purposeless lives, trashing their own neighborhood, it's the natural end point of the world. megyn: there does seem to be class warfare mentality of some. take a look at this, for example: >> these are a couple of people who appear to have been at it. i'm just -- i live here. i'm just astounded at what you're doing. >> we're getting our taxes back. >> you're getting your taxes back. what do you mean by that? >> we pay taxes. >> by stealing things, you're getting your taxes back? are you proud of this? are you proud of what you're doing? okay. she apparently thinks she's getting her taxes back. megyn: susan, there was another one we ran, that talked about people wanting to punish the rich, that they were angry at the rich.

that would include you, the business owner! >> according to the obama administration, i certainly would. i don't consider myself rich! but i tell you what, i do agree a bit with what mark was saying, there is this entitlement generation that we have. here, here, here, in this country. but there's also an issue here that is running parallel, that for the first time, constituents agree on, and that is they're fed up, they do not have hope, they think the government is totally disconnected from what is going on in the real world, and we particularly see that with small business. and i tell you what, over the weekend when the political pundits were trying to tell us that the downgrade of the s&p, of the u.s. debt, was not going to impact the markets because the markets had already anticipated it, small business owners were setting back going oh yeah, right, we weren't buying it, we're smart, but we recognize now that don't isn't going to do anything for us, our hands are tied, we're being strangled, we're being told to create jobs, we're being told to reinvest capitalism in our business, but where are we going to get it, because consumer confidence is down, consumer spending

is down and as long as that is occuring we understand basic math, and that is if you don't have the money coming in, you can't spend it. megyn: you are the group that continually gets mentioned as you need to be taxed more because -- >> it's ridiculous. it's all about the rhetoric. it is just rhetoric. megyn: i want to bring this home. because i think it's not about blaming the parents. that's the first thing, i can do the best job i can as a parent but the truth is we all become who we become but what we can do, first thing, the government needs to act, whether it's over in europe or here, you have to follow -- >> but that's how we got into this mess! >> i mean, you say it's not the fault of the parents, but there are something like a tenth of the population of the united kingdom where nobody in the house, not just the kids, where nobody in the house has done a day's work since tony blair took office on may first, 1997, in other words, for these kids' entire lives, if they're 15, 16, they've been raised in households when nobody works because nobody needs to work. >> i'm not disagreeing that,

but what i'm saying, when you're saying it's all entitled kids, there's a lot of kids today, my concern is with my kids and what am i going to do because we watch the news and they ask the questions, so for me, it's really -- >> but the argument is that they're being raised in a society that has maybe not to the extent we're seeing in london, but -- but that we have an entitlement culture here, that is the criticism, so they're sort of learning that by osmosis. >> maybe they see that way. from where i come from and where i associate, there's a hard working ethic and you're always going to have different groups of people and you're always going to have different groups of parents who push their kids or make them work harder. >> i have to jump in here, i don't think we have a work ethic in this country anymore. i'm sorry, when we are giving people 99 weeks of unemployment and they're still crying they can't find a job, i walk by and see job wanted signs all over the place. you know what, i've been an entrepreneur off and on all my life since i was 15 years old, i always figured out a

way to make money. there a ways to make money. >> you think about the generation that preceded the one before us, my nana, 96 in october, she had to quit high school when she was a sophomore to help support her family, taking a job at the comfort coal company in new jersey for 5.95 a week, she did that because they were of a mind-set back then that you did what was necessary to help support your family. do you really think that the kids today would do that here in america? >> again, i think there are different groups of kids you're talking about, okay? again, my kids, well -- they will know they have to work hard, because that's what i instill in them. >> but we're talking about america right now and how americans are raising chern, whether we could wind up a situation that -- >> well, i think you could, if you -- just to talk about pair nts and grandparents' generations, in 1940 the average american had an eighth grade education, they understood that at 13, you were an adult, you know? you were a kid until you were about 13, 14, then you were grown up. >> but that's not right, either.

>> but we've got nine-year-old girl rioters trashing their own neighborhoods. we have extended adolescence at both ends. if you're lucky you don't have to leave it until 26, 27, 28, 30. and maintaining people in that state -- life, a sense of self-worth, a sense of self-dignity is connected with the kind of stuff you do, it's connected with finding some kind of reward in work and family and providing for your family. you wouldn't hire any of those people. would you? you say people aren't hiring. would you hire any of those crazy people? >> well, i just have to say i feel very proud that i never furloughed anyone in the recession, i never had to ask anybody to take a pay cut but i know having grown up in an entrepreneurial environment the employees think the owner are is rich and there are times i went out a -- without a paycheck and they got paid. megyn: appreciate it.

we are speaking of jobs and the economy. we are expecting to hear from president obama on job creation in michigan. we'll bring that to you. the raid that killed bin laden is coming to the big screen but is raising questions about whether election laws are being violated. that's next.

megyn: welcome back, folks. tonight, here we are, just hours away from the big debate in iowa, hosted by fox news channel, iowa examiner and republican party. breathe bear will monitor it. here they are, setting up. big moment tonight, folks, it really, really is the kickoff in earnest to the election season, and there are some republican hopefuls there who hope really to have a bang-out night tonight, watch the debate on fnc, these folks are going to be taking aim politically at this man, you can be sure of that, president obama, in advance of this debate, getting out to talk about jobs. jobs, jobs, jobs, on to holland, michigan to do it. we're going to take a listen to the president now.

>> -- worst recession that we've had in generations, and start making things in america that are sold all around the world. and that's why i'm here today. i've said it before, i will say it again, you cannot bet against the american worker. >> [applause] >> don't bet against american ingenuity. >> [applause] the reason a plant like this exists is because we are a country of unmatched freedom, where ground breaking ideas flourish. we've got the finest universities, the finest technical schools, the most creative scientist, the best entrepreneurs, all of which is why we are home to the world was most dynamic and successful business, large and small. [applause] and that's why

even in these difficult times, there is not a single country on earth that wouldn't trade places with us. not one. we've got to remember that. but we also know that we face some tough challenges right now. you know what they are. you have lived them every day. in your communities, in your families, you know too many people who are out of work, struggling to get by with fewer shifts or fewer customers, paychecks aren't big enough, costs are too high. and even though the economy has started growing again since the recession started in 2007, the fact is it's not growing fast enough. now, some of what we're facing today has to do with

events beyond our control. as the economy was improving and improving through 2009, 2010, the beginning of this year, suddenly it was hit with the unrest in the middle east that helped send gas prices through the roof. europe is dealing with all sorts of financial turmoil that is lapping up on our shores. japan's tragic earthquake hurt economies around the globe, including ours. cut off some supply chains that were very important to us. and all of this has further challenged our economy. and as we've seen, it's playing out in the stock market. wild swings, up and down. and it makes folks nervous. and it affects the savings of families all across america.

now, challenges like these, earthquake, revolutions, those are things we can't control. but what we can control is our response to these challenges. what we can control is what happens in washington. unfortunately, what we've seen in washington the last few months has been the worst kind of partisanship, the worst kind of gridlock, and that gridlock has undermined public confidence and impeded our efforts to take the steps we need for our economy. it's made things worse instead of better. so what i want to say to you, jon: johnson controls, is there is nothing wrong with our country. there is something wrong with our politics.

there's something wrong with our politics that we need to fix. we know there are things we can do right now that will help accelerate growth and job creation. that will support the war going on here at johnson controls, here in michigan, and all across america. we can do some things right now that will make a difference. we know there are things we have to do to erase a legacy of debt that hangs over the economy. but time and again we've seen partisan brinkmanship get in the way, as if winning the election is more important than fulfilling our responsibility to you and to our country. this downgrade you've been reading about, could have been entirely avoided if there had been a willingness to compromise in congress.

see, it didn't happen because we don't have the capacity to pay our bills. it happened because washington doesn't have the capacity to come together and get things done. it was a self-inflicted wound. [applause] >> that's why people are frustrated. they've been hearing my voice. that's why i'm frustrated. because you deserve better. you guys deserve better. all of you, from the ceo, down, are working hard, taking care of your kids or parents, maybe both, you're living within your means, may be trying to save for your child's college education or saving for retirement, you're donating

to the church or the food pantry, you're trying to help the community, you're doing your part, you're living up to your responsibilities. it's time for washington to do the same. to match your resolve and to match your decency and to show the same sense of honor and discipline. that is not too much to ask. that's what the american people are looking for. [applause] >> and if that can happen, we know what's possible. we know what we can achieve. look at what's happening in holland, michigan. every day, hundreds of people are going to work on the technologies that are helping us to fight our way out of this recession. every day, you're building high-tech batteries so that we lead the world in manufacturing the best cars and the best trucks and that

just doesn't mean jobs in michigan. you're buying equipment and parts from suppliers in florida and new mexico and ohio and wisconsin and all across america. so let's think about it. what made this possible? the most important part is you. your drive, your work ethic, your ingenuity, your management, the grit and optimism that says we've got an idea for a new battery technology or a new manufacturing process, and we're going to take that leap, and we're going to make an investment, and we're going to hire some folks, and we're going to see it through. that's what made it possible but what also made this possible are the actions that we took together as a nation, through our government, the fact that we

were willing to invest in the research and the technology that holds so much promise for jobs and growth. the fact that we helped create, together, the conditions where businesses like this can prosper. that's why we're investing in clean energy. that's why i brought together the world's largest auto companies who agreed for the first time to nearly double the distance their cars can go on a gallon of gas. [applause] that's going to save customers thousands of dollars at the pump. it's going to cut our againence on foreign oil. it's going to promote innovation and jobs, and it's going to mean more ground breaks and job

postings for companies like johnson controls, and that's how america will lead the world in automative innovation and exports in this country. think about it. that's what we got done, and by the way, we didn't go through congress to do it. [applause] but we did use the tools of government, us working together, to help make it happen. now, there are more steps that we can take to help this economy grow faster. there are things we can do right now that will put more money in your pockets, will help businesses sell more products around the world, will put people to work in michigan and across the country. and to get these things done, we do need congress. they're common sense ideas that have been supported in the past by democrats and

republicans. things that are supported by carl levin. the only thing keeping us back is our politics. the only thing preventing these bills from being passed is the refuseal of some folks in congress to put country ahead of party. there are some in congress right now who would rather see their opponents lose than see america win. and that has to stop. it's got to stop. we're supposed to all be on the same team. especially when we're going through tough times. we can't afford to play games. not right now. not when the stakes are so high for our economy. and if you agree with me, it doesn't matter if you're